Section 202: Prohibited acts relating to professional employer services; disciplinary actions; complaints; hearing; sanctions
Section 202. (a) A person shall not knowingly and intentionally: (i) offer or provide professional employer services or use the names PEO, professional employer organization, staff leasing, employee leasing, administrative employer or other title representing professional employer services without registering with the department pursuant to section 196; (ii) provide false or fraudulent information to the department in conjunction with any registration, renewal or in any report required pursuant to sections 192 to 203, inclusive; (iii) enter into a PEO relationship and split a client workforce for the sole purpose of avoiding compliance with federal, state or municipal laws; or (iv) make a material misrepresentation to the department, to other governmental agencies or to covered employees.
(b) Disciplinary action may be taken by the department for violation of sections 192 to 203, inclusive, including for: (i) the conviction of a PEO or a controlling person of a PEO of a crime that relates to the operation of a PEO or the ability of the licensee or a controlling person of a licensee to operate a PEO; (ii) knowingly making a material misrepresentation to the department or other governmental agency; or (iii) a willful violation of sections 192 to 203, inclusive, or any related order or regulation.
(c) Any individual may file a complaint with the department against a PEO, PEO group, controlling person of a PEO, person offering professional employer services or a client. The complaint shall be filed in writing, with the department, in a form prescribed by the director.
(1) Upon receipt of a complaint, the department shall proceed to review and investigate the complaint to determine if further action is warranted.
(2) If the director, after investigation, has cause to believe that there has been a violation of this chapter, the director may refer the complaint to the office of the attorney general.
(d) Upon finding, after notice and opportunity for hearing, that a PEO, PEO group, controlling person of a PEO, person offering professional employer services or client has violated 1 or more provisions of this chapter, including the failure to furnish records and requested information to the department and its inspectors, or has hindered or interfered with any authorized inspector while in the performance of the inspector's duties, subject to any appeal, the director may: (i) deny an application for a license; (ii) revoke, suspend, restrict or refuse to renew a license; (iii) impose an administrative penalty in an amount not to exceed $1,000 for each material violation; (iv) place the licensee on probation for the period and subject to conditions that the department specifies; or (v) issue a cease and desist order.